Alok Industries plans to raise ₹300 crore by selling a prime office space in Mumbai in six months, which will be used to pare debt.

The textile company is in the process of cutting debt by ₹1,700 crore in two years by selling industrial land it owns in Silvassa (Dadra and Nagar Haveli) and Vapi (Gujarat).

Alok has a consolidated debt of ₹20,000 crore and standalone loans worth ₹16,000 crore.

The company also plans to raise ₹10,000 crore as export advance from customers based on the guarantee issued by Indian banks.

This apart, it intends to reduce interest cost by repaying debt of ₹1,000 crore a year from the free cash flow to be generated from the business.

The company recorded a total income of ₹3,757 crore in the September quarter, and paid ₹559 crore in interests.

Dilip Jivrajkar, Managing Director, Alok Industries, told reporters the operational efficiency would also improve with the company connecting to the national grid by setting up a 220 kV substation at its plant in Gujarat and shifting to coal from gas at the captive power plant.

The company buys 40 per cent of its power requirement from the grid.

“By connecting to the national grid, we can buy power much cheaper than ₹4.30 a unit charged in Silvassa. These two initiatives will result in a huge savings,” Jivrajkar said.

The power cost in Silvassa is among the lowest compared to the national average cost of ₹6 a unit.

Alok has already decided to exit all the non-core business, including retailing, and focus only on textiles.

Jivrajkar said the next two years will be good for Indian companies with improved operational efficiency and rising overseas demand.

The cost of operation in China, which accounts for 36 per cent of the global export market of $770 billion, is on a steady rise.

The bumper cotton crop and improvement in operational efficiency have brightened the prospects of textile companies in India, the second largest textile exporter with a market share 4.5 per cent.

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